Home > Sound > 24Bit Media Players > Sonos Set To Get Battered As Competitors Go After Them

Sonos who were a no show at IFA 2018 in Berlin, are facing a serious threat of losing market share in Australia, with both mass and specialist retailers telling ChannelNews that the arrival of Bose and Harman Kardon with their new Citation range of networked audio problems will create problems for the US sound Company.

This is on top of the threat the Company faces from Amazon with their Echo speakers Google as well as Apple who are set to expand their sound offering up against Sonos.

In the specialist audio and home installation channel dealers believe that the “saving grace” for Sonos at this stage is the seamless integration of the Sonos offering into control systems such as Control 4 however this is set to be “short lived” as Bose looks to expqand their relationship with both integrators and the specialist channel.  

At a mass dealer level retailers such as JB Hi Fi, David Jones, Best Buy in the USA and Curry’s in the UK, are set to range both the new Bose and Harman Kardon range networked speakers, with one Australian retailer claiming that the specs of the new Bose and Harman Kardon devices which come with voice activation built in as well as 24bit lossless audio output are going to make it easy to sell up against the proprietary Sonos offering.

This week Sonos launched another direct sell offer up against their retail channel, this time they are offering their new Beam soundbar and two Sonos Play One of $999 but only if you buy direct a move which several retailers have said is the reason that they will reccomend alternate products to what Sonos is offering.

Next month the US sound Company who has not made a profit despite having the global networked audio market to themselves for several years is set to announce their first results since the Company was IPO listed.

Up until now and without any competition 38% of Sonos customers bought multiple products in 2017. About 61 % of the company’s customers own more than one Sonos product.

The Sonos ecosystem model, coupled with a platform-agnostic approach, could allow the company to sell more speakers claim analysts who are now convinced that the arrival of Bose and the impact of a well-known brand such as Harman Kardon now owned by Samsung will “crimp” Sonos sales particularly in the US and European markets in the last quarter of 2018 and into 2019.

Despite no competition in the networked audio market, the company’s revenue growth trends have been tepid of late claims Trefis.

They claim that over the last two years, Sonos’ revenues have grown by less than 9% annually, and the company has also yet to reach profitability.

This is even though the company has been regularly releasing new products.
Moreover, the upgrade cycles for the company’s products are likely to be very long, as speakers are expensive (as much as $900 for soundbars) and typically last for several years.

This means that sales are likely to be one-time in nature once a customer builds a full setup, without recurring revenue in the form of other services.

Moreover, competition in the speaker market is also likely to heat up, with Amazon, Alphabet and Apple pushing their respective Echo, Google Home and HomePod speakers.

While Sonos speakers already play well with technologies from these companies, they could offer deeper integration with their other products and services, thereby hurting Sonos’ market share.

Moreover, Internet giants have thicker margins from their Services businesses, allowing them to subsidize hardware sales to lock customers into their ecosystems. This is something Sonos may not be able to do considering its hardware-oriented business model.

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